Ontario moving forward on cap-and-trade system

Environmental lawyers at Osler, Hoskin & Harcourt said that the Ontario Ministry of the Environment's posting of a discussion paper on GHG emission reductions in January is a sign that a cap-and-trade system is in the works for the province

Environmental lawyers at Osler, Hoskin & Harcourt said that the Ontario Ministry of the Environment’s posting of a discussion paper on GHG emission reductions in January is a sign that a cap-and-trade system is in the works for the province.

“This Discussion Paper is the latest indication that the Ontario Government intends to pursue a greenhouse gas reduction strategy that involves a cap-and-trade system that may have far-reaching effects on industry in the province,” write Daniel Kirby, Jack Coop, Jennifer Fairfax and Patrick Welsh in the Osler Update. “The Discussion Paper also makes it clear that the interests of stakeholders, including Ontario businesses, will be considered.”

The Paper speaks to the desirability of a GHG reduction strategy that is in sync with what exists in other jurisdictions, such as the market-based initiatives that exist or are in development in Europe, Asia, the U.S. Northeast, and the Western Climate Initiative in which Quebec is participating.

“A key aspect raised by the Discussion Paper is that Ontario intends to seek an equivalency arrangement with the Federal Government so as to render federal regulations inapplicable as long as equivalent Ontario regulations achieve identical (or better) outcomes,” the Osler authors write. ” The paper suggests that equivalency would allow for a regulatory framework that is more appropriate for Ontario as opposed to one that might be developed federally without necessarily considering issues of specific interest to Ontario.”